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amounts disbursed by Lender pursuant to § 9 (Protection of Lender's Security), and the balance in accordance with
<br />the terms and conditions of the Note.
<br />6. Prior Mortgages and Deeds of Trust; Charges; Liens. Borrower shall perform all of Borrower's obligations
<br />under any prior deed of trust and any other prior liens. Borrower shall pay all taxes, assessments and other charges,
<br />fines and impositions attributable to the Property which may have or attain a priority over this Deed of Trust, and
<br />leasehold payments or ground rents, if any, in the manner set out in § 23 (Escrow Funds for Taxes and Insurance) or,
<br />if not required to be paid in such manner, by Borrower making payment when due, directly to the payee thereof.
<br />Despite the foregoing, Borrower shall not be required to make payments otherwise required by this section if
<br />Borrower, after notice to Lender, shall in good faith contest such obligation by, or defend enforcement of such
<br />obligation in, legal proceedings which operate to prevent the enforcement of the obligation or forfeiture of the
<br />Property or any part thereof, only upon Borrower making all such contested payments and other payments as
<br />ordered by the court to the registry of the court in which such proceedings are filed.
<br />7. Property Insurance. Borrower shall keep the improvements now existing or hereafter erected on the
<br />Property insured against loss by fire or hazards included within the term "extended coverage" in an amount at least
<br />equal to the lesser of (a) the insurable value of the Property or (b) an amount sufficient to pay the sums secured by
<br />this Deed of Trust as well as any prior encumbrances on the Property. All of the foregoing shall be known as
<br />"Property Insurance ".
<br />The insurance carrier providing the insurance shall be qualified to write Property Insurance in Colorado and shall be
<br />chosen by Borrower subject to Lender's right to reject the chosen carrier for reasonable cause. All insurance
<br />policies and renewals thereof shall include a standard mortgage clause in favor of Lender, and shall provide that the
<br />insurance carrier shall notify Lender at least ten (10) days before cancellation, termination or any material change of
<br />coverage. Insurance policies shall be furnished to Lender at or before closing. Lender shall have the right to hold
<br />the policies and renewals thereof.
<br />In the event of loss, Borrower shall give prompt notice to the insurance carrier and Lender. Lender may make proof
<br />of loss if not made promptly by Borrower.
<br />Insurance proceeds shall be applied to restoration or repair of the Property damaged, provided such restoration or
<br />repair is economically feasible and the security of this Deed of Trust is not thereby impaired. If such restoration or
<br />repair is not economically feasible or if the security of this Deed of Trust would be impaired, the insurance proceeds
<br />shall be applied to the sums secured by this Deed of Trust, with the excess, if any, paid to Borrower. If the Property
<br />is abandoned by Borrower, or if Borrower fails to respond to Lender within 30 days from the date notice is given in
<br />accordance with § 16 (Notice) by Lender to Borrower that the insurance carrier offers to settle a claim for insurance
<br />benefits, Lender is authorized to collect and apply the insurance proceeds, at Lender's option, either to restoration or
<br />repair of the Property or to the sums secured by this Deed of Trust.
<br />Any such application of proceeds to principal shall not extend or postpone the due date of the installments referred
<br />to in §§ 4 (Payment of Principal and Interest) and 23 (Escrow Funds for Taxes and Insurance) or change the amount
<br />of such installments. Notwithstanding anything herein to the contrary, if under § 18 (Acceleration; Foreclosure;
<br />Other Remedies) the Property is acquired by Lender, all right, title and interest of Borrower in and to any insurance
<br />policies and in and to the proceeds thereof resulting from damage to the Property prior to the sale or acquisition shall
<br />pass to Lender to the extent of the sums secured by this Deed of Trust immediately prior to such sale or acquisition.
<br />All of the rights of Borrower and Lender hereunder with respect to insurance carr iers, insurance policies and
<br />insurance proceeds are subject to the rights of any holder of a prior deed of trust with respect to said insurance
<br />carriers, policies and proceeds.
<br />8. Preservation and Maintenance of Property. Borrower shall keep the Property in good repair and shall not
<br />commit waste or permit impairment or deterioration of the Property and shall comply with the provisions of any
<br />lease if this Deed of Trust is on a leasehold. Borrower shall perform all of Borrower's obligations under any
<br />declarations, covenants, by -laws, rules, or other documents governing the use, ownership or occupancy of the
<br />Property.
<br />9. Protection of Lender's Security. Except when Borrower has exercised Borrower's rights under § 6 above,
<br />if Borrower fails to perform the covenants and agreements contained in this Deed of Trust, or if a default occurs in a
<br />prior lien, or if any action or proceeding is commenced which materially affects Lender's interest in the Property,
<br />then Lender, at Lender's option, with notice to Borrower if required by law, may make such appearances, disburse
<br />such sums and take such action as is necessary to protect Lender's interest, including, but not limited to:
<br />9.1 any general or special taxes or ditch or water assessments levied or accruing against the Property;
<br />9.2 the premiums on any insurance necessary to protect any improvements comprising a part of the Property;
<br />9.3 sums due on any prior lien or encumbrance on the Property;
<br />9.4 if the Property is a leasehold or is subject to a lease, all sums due under such lease;
<br />TD72 -8 -10. DEED OF TRUST (DUE ON TRANSFER — STRICT) Page 2 of 7
<br />Escrow No. F0487990- 397DGO
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